AG Barr sales fizz higher in fourth quarter

Stronger sales in the final few months of the year enabled Scottish soft drinks maker AG Barr to just about hit full year targets after a slowdown in the previous quarter.

The maker of Irn Bru, Tizer and Rubicon canned drinks said it was "cautiously optimistic" about achieving further growth in the new financial year but admitted the operating environment and market conditions remained "challenging".

In the period to 25 January, sales grew "well ahead of the total soft drinks market" at 5% in the fourth quarter, meaning full year revenue is expected to be roughly £259m, representing year-on-year growth of around 2%.

The lost contract to produce Orangina in the UK prevented annual sales growth from hitting 3% on a like-for-like basis.

Margins were prioritised in the second half, with costs managed across the business and more aggressive price promotion avoided.

The FTSE 250 group added that it now expected to be in a positive cash position at the year-end, thanks to strong free cashflow generation and some phasing changes in capital expenditure plans.

"All core brands have performed well across the year in what has been a period of low market growth in soft drinks," the company said.

"Despite the underlying performance the market has at times been volatile, with periods of intense competitive trading activity, as brand owners and retailers across varied channels fought for market share."

It also reported good progress in the execution of the operational improvement plans and that commissioning of the new carton and multi packing facilities at Milton Keynes was "well underway", which will enable the closure of a less efficient site in early February.

Full year results will be released on 24 March.

Broker Shore Capital said full year revenue would be slightly lower than its £261.7m forecast but not materially so, with cash flow seeming to be "slightly stronger than we expected".